Convergence of RSP
With the updated information, I notice that almost all RSP are converging to the same formula: Accepts any risks, but can cede at most 5% of the exposure.
I'm probably wrong somewhere along the way so please correct me!
- In Ontario, the "rule of 85%" has disappeared and the max ceded is now 5% instead of 10%
- In New Brunswick and Nove Scotia, the "First chance/Inexperienced Drivers" system have disappear and now the pools apply to all without discrimination
Does that mean the questions about the difference between Ontario and Nova Scotia for example, are now invalid? Can we say that these three RSP are now "exactly the same"?
Another question that is related to that is Alberta. From what I understood, this province is difference because there is a "Take All Comer" rule, combined to a maximum regulatory premium. The difference between grid and non-grid is obviously that the insurer can cede 100% of risk that were charged the maximum premium. And my last question: because of that rule, does that mean, there is no FARM in Alberta? (I'm asking this because in the question Spring 2019 #8, there is a list where FARM is not there and AB is not in the list)
Comments
Well for Nova Scotia it does seem like there is still a 'member class limit' which I do not think Ontario has
FARM operates in all regions that the facility association operates in and this includes AB. You can see in their auditor's statement here: https://www.facilityassociation.com/docs/1-FARM and UAF FS YE 2021 v09 wbkmrk.pdf
As to how it operates together with the grid, I am not sure since it isn't in the paper and it probably won't be tested
Oh I see! So in Nova Scotia, despite the fact that the the pool now accepts all drivers (instead of just "Inexperienced with good experience") there is still the limit of one driver with less than 6 years of experience. I though that both rules were related and dropping th restriction also meant to drop the limit. Unless you are talking about another "member class limit"?
Tbh I am not sure what 'member class limit' explicitly refers to since it is not in the paper and is only referenced in the additional attachment, so you'd probably would not have to know it in the exams